Budget: $5.2b or $8.8b surplus? Unemployment: 2.1 or 4.5%

Photo: Narin BI/CC BY 2.0

February 20, 2017

$5.2b Budget surplus

From the Straits Times report – “Mr Heng said he expects a budget surplus of $5.2 billion for FY2016, or 1.3 per cent of the gross domestic product (GDP). This is higher than the surplus of $3.4 billion – or 0.8 per cent of GDP – budgeted a year ago.

However, excluding the government’s top-up to funds and Net Investment Returns Contribution from past reserves, there is an expected basic deficit of $5.6 billion, or 1.4 per cent of GDP.

“FY2016 was hence an expansionary budget,” said Mr Heng.

It remains an expansionary budget for the upcoming financial year, he said, adding that the expenditures are expected to be $3.7 billion, or 5.2 per cent higher than for FY2016. A smaller budget surplus of $1.9 billion, or 0.4 per cent of GDP, is expected in FY2017.”

So, once again we have a huge Budget surplus of $5.2 billion.

$8.8b surplus?

If we add back the “Top-ups to Endowment and Trust Funds” of $3.6 billion, which as I understand it – under IMF fiscal reporting guidelines should not be charged off as an expenditure – does it mean that the surplus may actually be about $8.8 billion?

Still not spending money on healthcare, CPF or HDB?

As to “He added that he expects expenditure needs to increase rapidly in the years to come, especially in healthcare and infrastructure. For example, annual healthcare spending has more than doubled to around $10 billion in FY2016, compared to five years ago. This amount will rise as the population ages, he added” – there appears to be no change to our fiscal policy of not spending any money, from a cashflow perspective – on healthcare, CPF or HDB – for example, annual Medisave contributions and interest on account balances may continue to exceed total Government healthcare spending ($10 billion) plus withdrawals for medical expenses and insurance premiums.

Unemployment rate 2.1%

With regard to the Budget speech – “Overall, unemployment rate remained low at 2.1% in 2016, but redundancies have been increasing and more workers are taking longer to find jobs. Sectors such as healthcare and education offered more jobs, while others shed them. In 2016, resident employment increased while foreign employment contracted” –

As I understand that the economic downturn has worsened since June 2016 – what is the non-seasonally adjusted unemployment rate for citizens and the number of Singaporeans unemployed in December, 2016? Has it crept up to around 4.5 per cent, with about 100,000 Singaporeans unemployed?

About the Author

Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional qualifications.